Bharti Airtel Ltd, incorporated in the year 1995, is a Large Cap company with a market cap of Rs 299864.69 Crore, operating inTelecommunications sector.
Bharti Airtel’s key Products/Revenue Segments include Service Revenue and Sale of Products for the year ending 31-Mar-2020.
Investment Rationale
In the last year, the stock has given ~5 per cent returns after much oscillation in its stock price – it slipped ~13 per cent from the peak of Rs 602 as high capex hurt FCF and deleveraging expectations, said Motilal Oswal. With improving FCF potential, the stock would certainly command better multiples. Motilal estimates factor in the AGR liability of Rs 260 billion.
However, they do not capture the corresponding potential upside for Bharti Airtel from incremental ARPU growth or potential market share gains from the AGR liability being fulfilled, added Motilal Oswal. This could garner an incremental EBITDA opportunity of ~ Rs 100 billioin. Even without this, the valuation seems compelling at FY23E EBITDA of Rs 639 billion, implying 8 per cent FCF yield (post-interest) it added.
Financials
For the quarter ended 31-12-2020, the company has reported a Consolidated Total Income of Rs 26567.00 Crore, up 2.44 per cent from last quarter’s Total Income of Rs 25933.90 Crore and up 20.64 per cent from last year same quarter’s Total Income of Rs 22021.60 Crore. Company has reported a net profit after tax of Rs 1570.70 Crore in latest quarter.
Promoter/FII Holdings
Promoters held 56.2 per cent stake in the company as of Dec 31, 2020, while FIIs held 17.8 per cent, DIIs 21.8 per cent and public & others 4.2 per cent.
